Can we develop very good looking UI in swing and if not what are alternatives

You can make it look just about however you want. Especially if you write up your own look and feel. I've done it myself with semi-transparent panels and simplistic buttons.

Have a look at the screen shots at:

http://www.taranfx.com/best-java-swing-look-and-feel-themes-professional-casual-top-10

Nimbus is a new look and feel which is gaining popularity, and it looks very professional imo:

Swing is very flexible with regards to look-and-feel and you can certainly make very good looking applications with Swing.

I recommend the book Filthy Rich Clients by Chet Haase and Romain Guy if you want to learn how to make nice Swing GUI applications.